Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decision-Making

Last year, Professor Merges and I co-authored this short article on the administration of Bilski. In light of the pending Section 101 cases and Judge Rader's opinion in Classen Immunotherapies v. Biogen, I thought I would post it here again. Download the twenty-page essay from SSRN.

Here is the introduction:

Now that the Supreme Court has decided Bilski v. Kappos, there is an enormous amount of speculation about the case's impact on patent applicants, litigants, and other participants in the patent system. Most of the commentary is concerned with the holding in Bilski, how this holding will be applied by courts and the Patent Office, and ultimately, the effect of the holding on inventors, and those who hold and seek patents.

We take a different approach; rather than try to cut through the complexity of Bilski, or predict how it will be applied, we talk about how to avoid it. We are interested in how to minimize the cost and confusion that accompany a review of patents for § 101 subject-matter eligibility. To be specific, we propose that the § 101 issue of Bilski be considered only when doing so is absolutely necessary to determine the validity of a claim or claims in a patent. We believe any claim that can be invalidated under one of the less controversial and less complex requirements for patentability—§§ 102, 103, and 112, for instance—ought to be disposed of without considering subject matter patentability. In other words, the Bilski issue should be avoided wherever it is not strictly necessary. To support this conclusion, we present a set of empirical data that indicates that the vast majority of patent claims challenged on subject matter eligibility grounds were also challenged on other patentability issues.

We set the stage for our proposal in Part II, which briefly reviews the history behind Bilski and explains its open-ended holding and individualized approach. The difficulty of applying the Bilski ruling to different types of patent claims leads us to Part III, in which we call into question an accepted (if largely implicit) principle of patent law—that the lexical priority of statutory provisions in the 1952 Patent Act dictates a necessary logical sequence of invalidity tests. We reject this widespread assumption. There is nothing in the statute that requires this.

Indeed, in Part III we argue that in many ways the very idea of a sequence of discrete patentability requirements is conceptually misleading. Claims can be and often are rejected by the Patent Office for multiple reasons, suggesting that at least certain claims suffer from defects that transcend specific statutory validity requirements. We argue further that the policy underpinnings of various requirements overlap in complex ways, so that in reality patentability doctrine does not test for a series of discrete and independent qualities that are distinct from and mutually exclusive of each other. In the same way, transcendent qualities of an invention can influence multiple doctrines simultaneously, with pioneering inventions (due to both a liberal treatment under enablement, and a broad reach under infringement doctrines) being a prime example. This demonstrates again that there is not and should not be a strong separation between various patent law doctrines. Another argument along these lines recognizes that while patentability doctrines are not discrete entities, neither is "the invention" whose validity is being considered. Patent applicants routinely present multiple, overlapping claims, all of which cover fine-grained variations on a central inventive insight or advance. So it is inaccurate to visualize patentability as a stepwise series of tests applied to a single "invention." It is not true for example that "invention X" passes § 101 and should thus proceed in logical sequence to be tested under § 102. One claim growing out of inventive insight X might present no § 101 problems at all, yet another claim in the same patent application might raise a difficult issue under this provision. Each claim, being a unique slice of the overall inventive insight, ought to be considered on its own terms, and in whatever order makes the most sense. Put another way, the mental model of a stepwise sequence of patentability determinations overlooks the highly granular nature in which different slices of the inventive concept are presented for validity testing.

This analysis is further developed in Section III.A. When a claim fails to pass muster under any single test of validity, that claim should be invalidated. No further tests should be applied. We describe this as "chain" theory of validity: once one link in the chain is broken, the claim fails, and there is no reason to proceed further. Beyond that point, any expenditure of resources on validity questions is inefficient. Pragmatic considerations enter at this point. Issues of cost, justiciability, and spillover effects are perfectly appropriate in determining the actual sequence in which validity tests are applied with respect to any particular patent claim. The non-linearity of patent validity tests, together with the principle of efficient administration, yields a simple rule: start with chain links that are, in general, easiest and cheapest to test, and when the chain fails, stop the process. That way, the costliest and most complex doctrines—the trickiest "links in the chain"— are often avoided, and in any event are put off until later. Therefore, § 101 should often be avoided, both at the Patent Office and in the courts. We justify this not only on efficiency grounds, but also by analogy to the Supreme Court rules of avoidance.

In Part IV, we apply this simple principle. It leads to several recommendations. First, though the PTO has good reasons for its longstanding practice of rejecting claims for multiple reasons, we recommend that §101 be used only as an exception or last resort even at the PTO. Next, we contend that the courts should proceed in a stepwise fashion, beginning with §§ 102, and 103, and 112, changing the order of doctrines as dictated by pragmatic considerations, and stopping as soon as a claim is conclusively invalidated. In all cases, the complex and costly process of deciding whether a claim presents patentable subject matter under § 101 should be deferred until very late in the process. Therefore, we recommend, courts should in effect hold off on the difficult task of evaluating claims under § 101—ideally deploying the full § 101 analysis only when that is essential, i.e., when a claim passes muster under the other validity doctrines.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1953512. Thanks!

23 thoughts on “Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decision-Making

  1. 23

    anon, thank you for your thoughtful post. However, there's a general consensus that too low a standard of invention retards the progress of useful arts because it effectively withdraws from the public domain that which is already there.

    From personal experience, I have dealt with patents that are completely obvious, but nevertheless possess broad and encompassing claims that they totally block whole areas of technical progress.  The holder of such a patent can effectively hold up the entire industry for ransom, and they have.

    Rather than talk about my personal history, perhaps one most best-known examples of the patent with overbroad claims that held up the entire industries is the Selden patent, which had broad claims to any engine for use in a car. The Second Circuit essentially held that if they were to construe the claim as broadly as it was written, the claim would've been invalid over the prior art. So they narrowed the construction down to what the inventor had actually invented. However, that was at the end of life of the patent. By that time, the patent had done enormous damage to the nascent automobile industry.

  2. 22

    We all generally recognize that too low a standard harms the progress in the useful arts. That is crucial.

    I wonder just how “crucial” this is. It appears that it is only “crucial” for its story-telling effect.

    Sure, I have read repeatedly how “evil” this is, but I have never seen any studies or data to back this up. “General” stories like this are more like the Bogeyman under the bed – more fiction than truth.

    I think the tendency is to overstate this and ASSume that it must be true. I also think the tendency is to ignore the invigoration that comes from the patent keep out zone. If you don’t want to pay the patentee, you are free to invent around. In that sense, a “too low” standard actually invigorates more innovation as more people invent around and society at large benefits from multiple solutions.

    It appears to me that this whole “struggle” is a tempest in a teapot and is more a philosophical ploy than any real detriment. I would be willing to listen to anyone with any actual examples of beign foreclosed from making progress based on a standard that is too low, but I have not seen any actual stories of such.

  3. 20

    Tell ya’ what, Proper, I’m filing a petition tomorrow morning asking to have you assigned to all of my cases. Examiners unwilling to game the system to get their points up are too few and far between.

    I, and most folks on reading this, agree with you that throwing a bunch of references out there and leaving it up to the applicant to guess which one or which combination is being applied doesn’t cut it.

    Unfortunately, after In re Jung (Mar.2011) I’m not sure the CAFC agrees. They seem to be saying in that case that all the examiner has to do to meet Section 132 is identify the statute and list some references. If the applicant responds on purely procedural grounds (i.e., whining about no prima facie case) without addressing the merits of the vague and ill-defined rejection, then the applicant loses.

    One of the most bone-headed CAFC decisions ever, which is REALLY saying something.

  4. 19

    The problem is that the number of rejections you have to respond to is the sum of all the combinations and permutations.

    Shortcut solution: explain the difference between the claim and the optimum combination of references (singular) and state: no provided reference, alone or in any combination, meets the claimed invention.

    The examiner still has the initial burden to clearly point out the rejection, and providing a “reverse Markush-type” and saying “it’s in there” fails to meet the standard for a proper rejection.

  5. 18

    I used to belly-ache about examiners making 3 separate 102 rejections and then making a 103 by combining all 3 of the 102 references. I don’t anymore, so long as it is crystal clear what references are being combined.

    What grabs my goat, tho’, is the “reverse Markush-type” 103 rejection which cites, in effect: at least two references chosen from the group comprising [sic] Reference 1, Reference 2, and Reference 3.

    I have seen such rejections cite 5 references. The problem is that the number of rejections you have to respond to is the sum of all the combinations and permutations.

    If on a second rejection, I don’t even reply or talk to the examiner, because these examiners are too dense or dishonest to listen. I call the supervisor and then file my appeal notice.

  6. 17

    that we follow the law

    And yet, Ned, it is you and yours that want to deviate from the law. You, then are calling yourself an extremist, yes? Compare to Easy’s “given the actual laws we have” comment, eh?

  7. 16

    Easy, the folks asking that we follow the law are not the one's with the agenda.  The folks who evermore press for the expansion of patentable subject matter into new areas not recognized by the law, or inconsistent with well established precedent, are the extremists.

    In other words, conservatives are not the extremists.

  8. 13

    I agree it is a polite dig at Diehr

    Not sure who you are agreeing with there, Ned (it?), the “polite” comment is geared as sarcasm to the “Stern” brief.

    It was not a subtle point.

  9. 12

    I agree with BB’s 10:46 am post, generally speaking. There is a rather profound difference between “efficiency” on one hand, and “taking short cuts for perceived short-term gains” on the other hand.

    The following quotes from the original post merit additional comment:

    It is not true for example that “invention X” passes § 101 and should thus proceed in logical sequence to be tested under § 102.

    Agreed. In certain cases (e.g., claims reciting mental steps), the 101 issue becomes clear only after the relationship of the invention to the prior art has been established.

    Next, we contend that the courts should proceed in a stepwise fashion, beginning with §§ 102, and 103, and 112, changing the order of doctrines as dictated by pragmatic considerations, and stopping as soon as a claim is conclusively invalidated.

    Claims invalid under 102 are quite often easily invalidated under 103 as well. In case of some future shenanigans by a higher court with respect to the 102 argument, it’s ridiculous and inefficient to avoid making the 103 rejection in the first instance.

  10. 10

    There was and is a continuing debate on how much a departure from the prior art is required to justify a patent. We struggle with words to descibe what we mean. We all generally recognize that too low a standard harms the progress in the useful arts. That is crucial.

  11. 9

    From the paper:

    minimize the… confusion that accompany a review of patents for § 101 subject-matter eligibility

    Here’s a hint: drop your presupposed agenda against particular art areas and the “confusion” dissipates rather quickly. The matter is only confusing if you try to hold onto your views given the actual laws we have.

  12. 8

    Wasn’t this case more about…

    How about 103?

    As in: Patentability shall not be negatived by the manner in which the invention was made. Manner is often masquerades under the disguise of how someone of ordinary skill may have created the invention, and is one of the more slippery subjective slopes in all patent law.

    As to “functional relationship,” clearly, a change in the composition of the doorknow, especially in the 1850’s would have a functional relationship to the end product, and if a choice of material offers some improvement, even an improvement such as cost, then the useful arts have been served.

    There was (and is) a desire to limit patents to some sort of “flash of genius.”

    This “flash of genius” mindset is insiduous and shows its misbegotten influence in many ways.

  13. 7

    Take Hotchkiss v. Greenwood. The claim was to an old doorknob with a clay knob. The SC held because the clay knob, itself old, had no new functional relationship to the shank of the doorknob, the claim was the work of ordinary skill.

    Now, what about this involved obviousness?

    Wasn’t this case more about what we now describe to be 112?

  14. 6

    I agree it is a polite dig at Diehr and that the brief actually argues that conflation is required, at least when the physical steps are all admitted to be old.

    Just for example, when everything is old but one element, and that element has no functional relationship to any of the other elements in the claims, such as the blue in blue computer, how do you handle this?

    I think 112, but it equally could be any of the other of 101/102/103.

  15. 4

    “When a claim fails to pass muster under any single test of validity, that claim should be invalidated. No further tests should be applied.”

    Luv it! Efficiency!

    Let’s apply this thinking to criminal law, too. Just try the “presumed-innocent” (lol) slime-ball on the one charge that is most likely to stick and forget the rest. Go for the murder charge, and forget the rape, kidnapping, theft, etc., etc.

    Then, when the murder charge gets reversed on appeal, the perp takes a 5th amendment walk and you save all that wasted money keeping him in prison for 30 years! More efficiency!

    Similarly, when you stop prosecution or invalidity analysis of claims at the easy 102 rejection, and it gets reversed on appeal, what do you do? Well, there’s no 5th amendment for patent claims so you walk it back and try 103.

    OK, then that rejection gets appealed and reversed. The whole serial-analysis-efficiency argument is looking pretty bleak at this point.

    But cheer up, we’ve still got 112 and 101. So we bust the claims on 112 and now that goes to appeal. Now you are 3 appeals and 10 years into this thing and it’s still pending. In 10 years the case has probably been handled by 12 examiners and so no one has a clue what’s going on.

    I’m tryin’ to find the efficiency here.

    The reason that all grounds for rejection and all assertions of invalidity are dealt with in parallel and not in series is that it is the most efficient way to do it in a system that allows multiple layers of appeal.

    If there were no appeals, I would agree, thrash the claims with the biggest club you have and leave it at that.

  16. 3

    largely agrees that 101/102/103/112 are interrelated and overlapping

    That’s a polite way of saying purposefully conflating and kicking up a cloud of dust to hide any real legal analysis.

  17. 2

    The “Stern” brief in Prometheus largely agrees that 101/102/103/112 are interrelated and overlapping. Trying to fit the problem with a claim into one or the other of theses statutory sections is going to cause more problems that it solves.

    Just for example, take the claim to a piano player with a new music roll. What is the problem here?

    1) The music itself is not functionally related to the player piano in any way different than any other music. This suggests a Section 112 problem.

    2) The music itself is new and non obvious, but if the music can be ignored for 102/103 purposes because of the lack of any new functional relationship, the novelty/obviousness problem disappears.

    3) From a 101 point of view, the music can be deemed to be the invention as it is the only thing new in the claim. Taken as a whole the claimed invention is not to the player piano, but to the music, something that is not patent eligible.

    The claim can be invalidated under all of the statutes, but in different ways.

    But the easiest just might be Section 112.

    “Stern” brief: link to americanbar.org

  18. 1

    blah blah blah, what is this? The 100th person to formally announce this is how we should do things? The PTO has good reasons for doing it like it does says the author. Good. Period. End of story. That’s how they’ll do it.

    Besides, who can’t see behind the thin veil of a blatant attempt to try to get less 101’s on first action and then have less examiners want to raise a new 101 at final after they got around art? The very idea is preposterous.

Comments are closed.